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North Carolina Real Estate Test Overview
North Carolina Real Estate Test Overview
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North Carolina Real Estate Exam Overview
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1
If a real estate firm is incorporated
Both
At least one of the officers must be licensed
Neither
The corporation must be licensed by the NCREC
2
A listing broker must provide the seller with a signed copy of the closing statements
Immediately after closing
Within 3 days
No later than 5 days after closing
After the deed is recorded
3
A buyer is buying a single family home. The appraiser will most likely use which method of appraisal?
GIM - GrossIncome Multiplier
Income approach
Cost approach
Market Data
4
According to NCREC rules, a valid sales contract can contain all the following EXCEPT
Terms of the buyer’s loan
How repair issues will be handled
Brokerage compensation split
Legal description of the property
5
Which of the following can a Provisional Broker do?
Prepare a CMA for a few
None of the above
Prepare an appraisal price
Prepare a BPO for a fee
6
Under and installment land contract, the title to property is held by the
Vendee
Vendor
Trustor
Trustee
7
A time share broker may be fined $500 for failure to provide the public offering statement within 5 days after contract
False
True
8
A property sold. All the following could be used to convey title except
Quitclaim deed
Warranty deed
Deed in lieu of foreclosure
Trustee’s deed
9
A grantor of property promises to defend the title against persons claiming an interest by, through, or under himself
Quitclaim deed
Grant deed
Special warranty deed
General warranty deed
10
A real estate licensee does not pay the annual fee. What is the time period to reinstate their license & pay the fee?
12 months
1 month
6 months
2 months
11
A joint tenant sells their interest to a 3rd party. What is the new relationship with the remaining owner and new owner?
Tenants in common
No relationship
2/3 interest original owner and 1/3 interest new owner
Joint tenants
12
In a condominium, each owner has a proprietary lease with the owner’s association for the unit
True
False
13
The broker will receive the sales commission from the seller when
Purchaser takes possession of the property
Seller lists the property w/ broker
An offer is procured by a ready, willing, and able buyer
The transaction is closed
14
Property management contracts are NOT required to contain
A legal description of the property
A contract period
An automatic renewal clause
A management fee
15
A property owner signs a 90 day listing agreement. The owner does before the listing expires. The listing is
Binding on the owner’s heirs for the remainder of the 90 days
Still in effect as the owner’s intention was defined
Terminated automatically upon the death of the principal
Binding only of the broker produces a buyer
16
How is the Loan To Value ratio calculated?
Mortgage amount / Sales Price = LTV
Mortgage amount / P+I = LTV
Sale Price / Mortgage Amount = LTV
P+I / mortgage amount = LTV
17
A buyer who finances the purchase of their home using a VA loan is permitted to pay a loan origination fee
False
True
18
A real estate trust account must
Identify date funds are received
Identify date funds are deposited
Identify date funds are disbursed
All of the above
19
The chief factor in determining whether an item is a fixture is the
Degree of customization
Method of attachment
Identity of the installing party
Intent of the annexor
20
The method that is the most reliable in estimating the value of an owner occupied, single family home is
Income capitalization approach
Cost approach
Sales comparison approach
Gross rent multiplier (GRM)
21
Zoning ordinances do NOT regulate
Minimum acceptable material and construction standards
The use which a property may be put
The placement of buildings on property
The bulk & density of buildings
22
If theowner of the dominant tenement becomes the owner of the serving tenement and merges the 2 Properties, the easement
Becomes dormant
Is terminated
Is not held by the owner
Is unaffected
23
NCREC members can be removed by the governor for misconduct
False
True
24
Which of the following is a lien on real estate?
A recorded deed of trust
An encroachment
A restrictive covenant
An easement
25
All of the following must have a NCREC firm license number EXCEPT
Corporation
LLC
Sole proprietorship
Partnership
26
Which is an example of a specific lien?
IRS income tax lien
Personal property tax lien
Special assessment lien
Judgement lien
27
The phrase, bundle of legal rights is
Refers to a tenants’ rights in a lease
Another name for legal description
Refers to legal documents in real estate
Part of the definition of real property
28
What form of agency exists under the usual real estate listing contract?
Special agency
General agency
Independent agency
Universal agency
29
In NC, the last day that real estate taxes for the current year may be paid w/o penalty is
At any time
Dec 31st of the current tax year
Jan 5th of the next year
Sept 1st of the current year
30
Which of the following terms is associated with Real Property Taxes?
Caveat venditor
Annuity coepits
Caveat emptor
Ad valorem
31
Each legitimate comparable should be as similar as possible in all the following EXCEPT
Sale price
Location
Square footage
Date of sale
32
A property MGMT firm must deposit tenant security deposit checks
Within 5 banking days after receipt
Immediately upon receipt
Within 3 banking days after receipt
Within 3 banking days after acceptance of the lease
33
The NCREC is responsible for
Issuing licenses to all applicants
Neither
Defining administrative requirements for BICs
Both
34
A buyer who finances the purchase of their home using a VA loan is permitted to pay loan discount points
True
False
35
The NC Mechanic’s Lien Law does not apply to construction projects costing over $30,000 on owner occupied dwellings
True
False
36
The deed that contains covenants against all encumbrances that would affect title conveyed and assured quiet enjoyment
Grant deed
General warranty deed
Quick claim deed
Special warranty deed
37
Which of the following statements is NOT TRUE?
A land contract is also known as an installment contract
Liquidated damages are agreed to in advance
Time is of the essence = duties are to be performed in a reasonable time
Equitable title is transferred when deed is signed by grantor @ closing
38
Which is NOT considered a trigger term under the Truth In Lending Act? (TILA)
Number of payments
Monthly payment amount
(APR) Annual % Rate
Annual interest rate
39
An unlicensed secretary in a real estate firm can solicit listings if
They have the BIC’s permission
None of the above
Permission from the owner of the firm
Hey solicit in the name of the firm
40
Which requires a real estate license?
Preparing an appraisal
Drafting a deed
Both
Neither
41
An Acceleration Clause will be found in which of the following documents?
Leases
Sale contracts
Mortgages
Listings
42
A broker gets her license on May 15, 2013 and is on “active” status. She must pay the annual renewal fee on or before
Dec 31st, 2013
June 30th, 2014
June 30th, 2013
May 15th, 2014
43
A transaction featuring an installment land contract
Buyer who defaults may loose rights to property & loose previous payments
Buyer gains equitable title to the property after all payments are made
Buyer has same rights as a buyer in a deed of trust
The contract terms are more advantageous to buyer
44
Trust monies received other than cash (checks,money orders etc.) must be deposited
Within 3 banking days after receipt
Within 3 banking days after contract formation
Immediately
Within 5 banking days after contract formation
45
Which of the following have clauses identifying the listing firm as the trustee for receiving/holding trust funds?
Listing agreement
Neither
Both
Offer to purchase
46
Ad valorem property tax rates may be adjusted every
8 years
2 years
4 years
Year
47
When can a seller receive a due diligence fee under the NC standard OTP and Contract?
At the settlement meeting
When a contact is created between seller & buyer
When the offer is presented to the seller
After the deed is recorded
48
A crier at an auction is not required to have a NC real estate license
True
False
49
Public land use controls include all of the following except
Master plan specifications
Environmental protection laws
Subdivision regulations
Deed restrictions
50
The NCREC is authorized to regulate commissions charged between the firm & client
False
True
51
A sales contract for real property may be terminated by all the following EXCEPT
Insanity of buyer
Death of seller
Destruction of the property
Mutual agreement of buyer & seller
52
A leasehold that automatically renews itself at each expiration is a
Periodic tenancy
Tenancy at sufferance
Tenancy at will
Tenancy for years
53
Which tax advantage is Not associated with owner occupied personal dwellings?
Deductibility of mortgage interest
Capital gains treatment of resale profits
Ability to depreciate the property
Possibility of tax-free capital gains
54
Deed restrictions and tax liens are examples of encumbrances
False
True
55
Which of the following does NOT need an NC real estate license?
Secretary of a property MGMT company who negotiates and executes leases
Both
Neither
Owner selling their own property
56
Debts incurred by an individual and become liens against real or personal property owned by that person are
Special assessments
General liens
Specific liens
Fiduciary encumbrances
57
Payments received by a time share developer
Must be deposited within 3 banking days of receipt
Have a 5 day recission
Neither
Both
58
The contract interest rate for FHA and VA Loans is determined by
Dept. of Veterans Affairs
HUD sets the FHA rates and DVA sets VA rates
The lender making the loans
Dept. of HUD
59
The annual net income of a commercial property remains constant and the capitalization rate increases.
The value of the property decreases
The value of the property increases the tax basis only
The value of the property is unaffected
The value of the property increases
60
All the following are elements of value EXCEPT
Uniqueness
Scarcity
Demand
Utility
61
The legal practice of oral buyer agency in Nc requires
The consumer go under contract to buy within 30 days
A definite time period for the agency relationship
The relationship to be up in writing before a presenting an offer
The buyer agree to oral dual agency
62
A real estate broker’s fiduciary responsibility to keep a principal informed of all facts affecting a transaction is
Obedience
Disclosure
Accounting
Skill, care & diligence
63
A necessary element of an enforceable real estate sales contract
The recordation of the agreement
An agreement for exchange of things of value between contract parties
Verbal meeting of the minds between contact parties
Receipt of earnest money by the named escrow agent
64
If a broker fails to pay their renewal fee by June 30th of the current year
Their license is suspended
Their license is terminated
Their license becomes inactive
Their license is expired
65
Rent would be best described as
All monies paid by the lessor to the leassee
The total amount owed under the terms of a lease
The contractual consideration to a third party
The consideration for the use of real property
66
In NC during foreclosure, the period of time between the breach of the note and the date of sale at the courthouse is
10 day upset bed period
Equitable redemption
Statutory redemption
Strict redemption
67
All the following are parts of the flooring system EXCEPT
Girders
Joists
Header
Sill
68
A real estate broker acting as the agent of the seller, is obligated to render faithful service to the principal
True
False
69
Which of the following are functions of the NCREC
To issue real estate licenses
To monitor broker compliance with firm requirements
To license all applications
To monitor firm-client fees
70
All the following would affect demand EXCEPT
Demographics
Wage levels
Population
Fiscal policy
71
The Truth in Lending Act (Regulation Z) is NOT concerned with the
Loan finance charges
APR
Loan to value ratio
Disclosure of loan costs
72
A real estate corporation license extends also to all of the following
All officers of the corporation
All employees of the corporation
None of the above
One officer of the corporation
73
All earnest money checks must be deposited
Within 3 days after acceptance of the offer
Within 3 banking days after acceptance of the offer
Within 3 days of receipt
Within 3 banking days of receipt
74
All REALTORS are either PBs, Full Brokers or BICS
False
True
75
The principal that is the basis for the sale comparison approach is the principal of
Replacement
Highest & best use
Substitution
Competition
76
In NC, the removal of the wheels and axels in a manufactured home converts a manufactured home into real property
False
True
77
A buyer purchases a single family home. The appraiser will MOST LIKELY use which method?
Income Approach
GIM
Cost Approach
Market Data
78
Land is sold to a church “so long as” the land is used for religious purposes. This is
Tenancy for years
Fee simple determinable
Fee simple condition subsequent
Fee simple absolute
79
All the following would be considered improvements to the land EXCEPT
Sewers
Buildings
Roads
Sidewalks
80
The NCREC requires all licensees to use an offer to purchase form which
Contains provisions specified by NCREC Rules
Neither
Both
Must contain a provision for payment of a commission
81
Brokers may refer to their CMA as an appraisal
True
False
82
A person may not perform a real estate related act when their license is
Neither
Revoked
Both
Suspended
